Wednesday, November 16th, 2011 - 11:22
As people from coast to coast think long and hard about the best performance measures to use, another crucial question often goes under the radar.
As people from coast to coast think long and hard about the best performance measures to use, another crucial question often goes under the radar. How do we know exactly where to set the targets, against which we’ll gauge the degree of success on a particular issue? And how can those targets help focus our attention on a strategic plan for progress?
Milwaukee, for example, recently set a target to reduce infant mortality in the city by 10 percent by 2017. The U.S. Department of the Interior plans on reducing agricultural water consumption by 20 percent by 2020. Philadelphia has set a long-term target of reducing departmental energy use by 30 percent with a shorter term goal of cutting it by 10 percent in fiscal year 2011.
It’s long surprised us how many measures are put out without any targets at all. And that’s a problematic exclusion. You can teach someone to shoot an arrow long and straight, but if there’s no bull’s-eye anyplace in sight, how can they possibly know whether they’re succeeding or not, and adjust their aim to come closer, if need be?
As Shelley Metzenbaum, associate director of the White House Office of Management and Budget told us, “Targets are not always essential. But they are powerful when you use them and when you know how to use them well. The most basic value of a target is that it clearly poses the question about what we’re really trying to improve.”
Of course, some managers may resist targets – claiming that their agency shouldn’t be judged by its capacity to move toward any specific goal, unless it has 100% power to achieve it. That’s an understandable argument. But William Bratton, who served as chief of police in both Los Angeles and New York City acknowledged the fact that his minions couldn’t absolutely control all the achievements necessary to cut crime rates, but maintained that didn’t matter – as his police could most certainly influence them.
Targets have the power to help managers allocate resources by indicating the relative speed with which they’re expected to move toward any given accomplishment. On some occasions, all that’s desired is a steady, gradual improvement. In others, there’s a mandate to move quickly – sufficiently quickly that so-called “stretch” goals are utilized to encourage managers to consider dropping the same old hammer and nails approach while trying to innovate with entirely new tools. “Stretch targets are ways of forcing yourself to make strategic changes,” says Sim Sitkin, Professor of Management at Duke University’s Fuqua School of Business, “you have to innovate.”
Focusing on the long-term
Consider the experience of the Federal Aviation Administration (FAA). There had been a series of high profile airline crashes in the years leading up to 1996-97, which resulted in the Commission on Aviation Safety and Security setting a target that said commercial aviation accidents could and should be reduced by 80 percent within ten years.
Mort Downey, senior advisor for Parsons Brinckerhoff, an influential planning, engineering, and program and construction management organization, explained, “When it was first announced people reacted like ‘How in heck are you ever going do to that? There are freak accidents and we are doing everything we can.’”
But no one backed off on the target, and it ultimately paid off. To the surprise of many, the 80 percent goal was met within the time allotted. As Downey explains, the target pushed the FAA to change its strategy significantly. In the past, it had generally been the case that each new crash would force the agency to quickly shift resources and concentration to a new focus (whatever had been the cause of the most recent crash). So it was a flavor of the month approach. But with this target firmly in their minds, the FAA kept resources focused on the biggest, most egregious issues, over a long period of time. Resources weren’t siphoned off, nearly as much, to try to solve whatever unique problems led to the most recent crash. In fact, it was pretty much guaranteed that three-quarters of the budget would go exclusively toward the one big long-term goal.
Pretty persuasive stuff. But Sitkin regrets that, in his experience, governments in recent years haven’t turned to stretch goals frequently, often thanks to the level of political conflict and a great deal of second guessing. “We’ve stopped placing the big bets on things that might make a big difference in the long run, but fail in the short run,” he says. Still, with budgets shrinking like a cashmere sweater in a hot water wash, he believes that “We are entering a new time and the old ways of doing things aren’t going to work.”
Breaking down the problems
Properly utilized and analyzed, targets can help cities states and the federal government to dissect a problem into its component parts, and concentrate on the element that must be changed in order to achieve the goal. In mid-November, for example when Milwaukee’s mayor, Tom Barrett announced the plans to cut infant mortality by 10 percent, he had also considered the underlying statistics.. It turns out that African Americans in Milwaukee have an infant mortality rate 2.6 times higher than that among Caucasian children. So, the only way to get to the city’s 10 percent target – and to reduce racial disparities – was to set yet another target: The mortality rate among African American must be cut by 15 percent over the same time period, according to the mayor.
Given the significance that smart target setting can have in an organization, it’s worthwhile being aware of some of the potential landmines that are sprinkled across this field: There appears to be genuine agreement that there’s little to be gained from setting targets linked to dramatic improvements over a too-short time span. For example, in Kentucky’s 2005-2010 strategic plan for postsecondary education, the state renegotiated performance metrics every two years, according to John Hayek, Sr., vice president for budget, planning and policy at the Kentucky Council on Postsecondary Education. But this approach stopped the state from concentrating resources on achieving longer term goals (much as the stock market tends to focus on quarterly earnings).
Now, says Hayek, “We are reorganizing how we do business around these performance targets, completely focused on achieving them by 2015. And those are aligned with a trajectory that will get us where we want to be in 2020.”
A few other issues
- It’s dangerous to set targets in isolation, says Jay Fountain, a member of the board of representatives from Stamford, Connecticut. “You have to have a sense of what is reasonable, possibly through national standards or comparisons to neighboring or similar jurisdictions.”
- There’s no magical power to the mere setting of targets. Setting a higher target doesn’t simply mean that people will work harder. The key is to use the targets in the process of developing ways to drive performance improvement.
- People monitoring progress toward targets need to be wary of cutbacks in financial resources available to meeting them – and make adjustments if necessary.
- It can be difficult getting all the players to agree on a reasonable target – particularly when their priorities are different. As Downy points out, “It is easier, for example, with safety (issues), when you can say ‘do it my way and fewer people will die.’”
- Underperforming, relative to targets can be a real risk, unless carefully managed. Legislators or city counsels may view missed targets as solid evidence that a budget should be cut. The result is that the target grows even more elusive.
Image courtesy of FloatingLemons / FreeDigitalPhotos.net